Coherent Identifier About this item: 20.500.12592/1cmtsx

Uncertainty and Risk-Taking in Science: Meaning, Measurement and Management

12 March 2021

Summary

An underlying rationale for public support of science is that private companies underinvest in research of a risky nature. Yet, risk in science is a poorly understood concept. This paper sets out the foundations for understanding, measuring and managing risk in science. We review insights offered from existing fields that study risk. These contributions, combined with knowledge gained from studies of science, are used to build a conceptual model of risk in science. The model is illustrated with examples drawn from the development of the IceCube Neutrino Observatory. It disentangles different components that determine risk and is used to operationalize an expert-based risk metric, potentially useful in peer review. Moreover, we review emerging empirical work on risk-taking in science, most of which suggests that the current reward structure of science discourages risky research. We develop and outline strategies for hedging and encouraging risk taking. We conclude by proposing a rich agenda for future studies, which is both intellectually challenging and critical for the future of science.

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education public goods public economics labor economics labor studies health, education, and welfare development and growth demography and aging productivity, innovation, and entrepreneurship innovation and r&d

Acknowledgements & Disclosure
The authors wish to thank Erin Baker, Luigi Buzzacchi, Enrico Cagno, Renato Frey, Massimiliano Guerini, Francis Halzen, Chris Hesselbein, Greg Petsko, Henry Sauermann, Viola Schiaffonati, Massimo Tavoni, Paolo Trucco, Reinhilde Veugelers, Roberta Zappasodi for fruitful discussions. The work contained herein has greatly benefited from discussions with scholars and professionals who participated in the Science of Science Funding annual meetings at the NBER Summer Institute and with seminar participants at the Kellogg School of Management, Northwestern. The views expressed herein are those of the authors and do not necessarily reflect the views of the National Bureau of Economic Research.

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